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This study aims to examine the determinants of bank stability based on three measures of bank stability while accounting for key bank-specific, macro-finance and structural variables. The aim is to underscore key indicators of stability that can be tracked by analysts, bank managers and regulators, especially in small economies such as Fiji.

The sample comprises a balanced panel of seven banking and financial institutions over the period 2000-2018. For consistency of data and similar functions in terms of deposit and loans, this paper considers five commercial banks and two credit institutions in Fiji. A fixed-effect method of regression is applied, to control for bank heterogeneity. The dependent variable is bank stability, which is based on three measures – the Z-score, the risk-adjusted return on assets and the risk-adjusted equity to assets ratio.

It is noted that bank size, funding risk, credit risk and Herfindahl-Hirschman index are positively associated with bank stability. In the extended model, both inflation and economic growth are positively associated with bank stability, although only inflation is statistically significant. Moreover, factors having a negative association with bank stability are the liquidity risk, the net interest margin and the remittances inflow. Additionally, the domestically generated political crises of the years 2000 and 2006 and the global financial crisis of 2007–2008 are negatively associated with bank stability.

This study empirically examines the determinants of bank stability in Fiji’s banking sector. Unlike previous studies, this study considers three measures of stability, with z-score as the dominant measure and as explanatory variables, bank-specific, macro-finance and structural variables. The bank-specific data used in the study were hand-picked from the disclosure statements of banks and macro-finance data were extracted from the World Bank Indicators. The study underscores pertinent factors associated with bank stability in the small island economy of Fiji, which can be of interest to analysts, bankers, regulators and researchers in this domain.

The banking sector stability depends in large part on the size of non-performing loans (NPLs). Hence, the factors which explain the problem loans are very useful information for banks. Notably, studies in this regard with respect to the small developing countries’ banking sector have received less attention. Therefore, this study aims to examine the determinants of NPLs with a case of Fiji’s banking sector, over the period 2000-2013.

The balanced sample consists of the entire banking sector (five commercial banks and two non-bank financial institutions). First, the authors estimate a base model which comprise bank-specific indicators that are related to bank management and then they extend the estimations to include macroeconomic/structural factors such as economic growth, inflation, changes of the real effective exchange rate, unemployment, remittances, political instability and external events like the global financial crisis. The estimations are done using pooled OLS, the random effects and the fixed effects regression methods.

The results show that the following indicators have negative association with NPL and are statistically significant with the conventional levels: return on equity, capital adequacy requirement, market share based on assets, unemployment and time. On the other hand, the net interest margin has a positive and statistically significant association with NPL.

Subsequently, the stability of the banking sector in small developing countries such as Fiji is largely dependent on banks’ profitability, solvency, size in terms of market share and the presence of a learning curve and keeping a close tab on the interest rate spread between loans and deposits.

The paper highlights the specific factors determining NPL in small developing economy of Fiji.

This study is the first to examine specific factors determining NPLs with respect to small developing economies in the Oceania region.

The purpose of this paper is to identify the arbitrage opportunities between US industry-level credit and stock markets with a focus on dynamic lead-lag relationships given that these markets involve heterogeneous agents operating over various time horizons.

The authors use daily data of 11 US industries stock markets and their credit counterparts to model the dynamic dependence and casual nexuses using time-frequency approach, namely, wavelet squared coherence (WTC).

The WTC estimation results show that credit and stock markets are out of phase (counter cyclical) and stock markets lead their credit counterparts. The coherence between two markets increases during financial crises. The banks (utilities) industry credit and stock markets have relatively high (low) dependence.

The casual nexuses between stock and credit markets have multilateral dimensions. Greater interest in examining the relationship between stock markets and credit default swap (CDS) spreads emerged as an important albeit a complex area of research, and gained prominence especially at the onset and following the global financial crises of 2007-2008 which clearly showed that the positive views of CDSs contribution in creating a resilient and efficient financial sector was nothing further from the truth.

The arbitrage and hedging opportunities between stock and credit markets are industry dependent and vary over investment time horizons. The utilities industry seems attractive for the investment with the objective to exploit arbitrage, but not for hedging.

The paper, for the first time, employs time-frequency approach to assess the arbitrage opportunities between US industry-level credit and stock markets.

This study aims to examine the impact of terrorism on return and systematic risk of Pakistan’s equity industries. Daily data from 1 January 2000 to 31 December 2014 for 12 industries based on the specific types of companies listed on Karachi Stock Exchange are used for the empirical analysis.

A multiplicative (additive) term is introduced in the standard capital asset pricing model to examine the change in systematic risk (industry returns) in response to the terrorist activities. The authors use the multiscale beta approach (Yamada, 2005) and the maximal overlap discrete wavelet transform (MODWT) to test the heterogeneous market hypothesis.

Terrorism activities increase the systematic risk for most of the industries and the negative impact on returns of banks and the financial industry. It is noted that terrorism positively impacts (increases) the industrial systematic risk mainly in short-run (between two and four days-time horizon).

The paper examines the impact of terrorism on a broad list of industries’ (banks, basic materials, chemicals, construction, consumer goods, consumer services, financials, industrials, minerals, oil and gas, textile and utilities) risk and return in Pakistan, using the multiscale beta approach (Yamada, 2005) and the MODWT methods.

The study aims to explore the sectoral contributions defined as agriculture, manufacturing and services value added, capital inflows defined as workers' remittances, foreign direct investment, official development assistance and domestic credit by banks as a proxy for financial deepening in Brazil-led, and Mexico-led clusters, and Latin America and the Caribbean region as a whole. The goal is to ascertain the polarization and uniformity effects of these parameters in shaping the growth and development in the midst of global financial crisis and economic challenges facing the region.

Using the classifications of Brazil-led cluster and Mexico-led cluster from Izquierdo and Talvi, the study is advanced using panel (pool) data estimation using the ARDL approach. The author used the augmented Solow framework to advance the study. He first established the desired cointegration vector for individual countries within the cluster, each cluster level and the region prior to pursuing the regression estimation. Both clusters were combined to represent the region. The author estimates the short-run (first-difference) and long-run effects of sectoral contributions and capital inflows in the region.

The region's capital productivity is driven by Brazil-led cluster. In phase 1 (sectoral shifts), polarization is noted in agriculture (dominated by Brazil-led cluster); and services (dominated by Mexico-led cluster). Uniformity exists in two clusters and the region with respect to manufacturing share where both clusters have almost equal (positive) dominance and hence exuding positive effects in the region. In phase 2, polarization is noted in remittances (dominated Brazil-led cluster), foreign direct investment (dominated by Mexico-led cluster) and financial development (dominated by Brazil-led cluster). Uniformity is noted in both clusters and the region from negative effects of official development assistance (ODA).

The study is fairly new and contemporary in its attempt to analyze the effects of sectoral shifts and capital inflows in Latin America and the Caribbean (LAC) region. Using the classification of Brazil-led cluster and Mexico-led cluster, it investigates the polarization and uniformity in the region with respect to these parameters. The study contributes to policy dialogue, and explores the emerging trends in key economic and structural factors of growth whilst highlighting some burgeoning issues shaping LAC's growth and development overall.

This paper aims to examine the long run impact of information and communication technology (ICT) on economic growth in the Sub Saharan African (SSA) region. The direct impact of ICTs use was examined for a 27-year period (1990-2014), before the Millennium Development Goals (MDGs) era (1990-1999) and during the MDGs era (2000-2014). Second and third objectives examined the nonlinear effect of ICT in the economic growth and their threshold values, respectively. The main growth enhancing transmission channels of ICT use were also looked at.

The study uses panel method technique of system generalist method of moment. The data period was collected from the years 1990-2014 from 45 SSA countries. The three main proxies of ICT are fixed telephone lines, mobile phone users and internet users per 100 inhabitants.

For the direct impact analysis, mobile phone and internet were found to have triggered economic growth. However, for nonlinear effect analysis, mass penetration of ICT proxies seems to slow economic growth. The threshold analysis showed a penetration rate threshold of 4.5 per cent for both mobile phone and internet, and 5 per cent for fixed telephone line before economic growth gets triggered. Finally, the results indicated that, except for financial development, human capital, institutional quality and domestic investment were the main growth enhancing transmission channels of ICTs use in the economy.

From a policy perspective, results suggest SSA region to open more doors for investment in technology to ensure sustainable development. Such policy has to focus on investment into main transmission channels of ICT, namely, human capital, institutional quality and domestic investment. The policymakers have to ensure that penetration of mobile phone, fixed telephone and internet is met by improvement in human capital, institutional quality and domestic investment. Moreover, to fully use the potential of ICT, improving the financial sector is highly recommended.

In SSA, studies that address the impact of ICT on economic growth was almost non-existent, especially on its nonlinear effect and main transmission channels. While few studies have examined the direct impact of ICT, this study extended the scope by including the main growth enhancing transmission channels and nonlinear effect of ICT on SSA economies using recent data.